Quote of the Week: The Wine Industry Indicator


February 15, 2013

“It’s another good-news, bad-news year in fine wine. While we are quite optimistic about the future prospects in the US wine business, a combination of events will continue to hold back robust growth in 2013.”


Who said it: Rob McMillan, founder of Silicon Valley Bank’s Wine Division and author of the report the SVB Wine Report.


In Context: Wine sales forecasts are often a good indicator of growth and prosperity in an economy, just like low apartment vacancy rates, and rising housing prices indicate a booming economy. It is the kind of information that is useful for private equity investors, particularly those that invest in consumer good sectors and that is why we included it here, not to mention that some of our readers might be interested in buying wine when prices are low. Silicon Valley Bank, which provides banking services to the wine industry, released its Annual State of the Wine Industry Report this week to highlight trends and issues facing the US wine industry. The SVB report says that economic uncertainty, slowing domestic GDP, lack of economic leadership worldwide, aging [Baby] Boomers, not to mention the quantity of the 2012 harvest which will slow higher growths for wine market participants. It says to look out for improved consumer demand only after improved hiring and better housing markets figures appear. It concludes that the first half of 2013 will prove more difficult than most expect, but the back half of the year should see improvement.


Where we found it: SVB

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